If Google Is Serious About Reforming Patent Mess, It Should Make A Bold Statement And Stop Using Motorola Patents To Demand Cash

from the now's-the-chance dept

We've discussed in the past the fact that Google has never used patents offensively. That is, while it has many patents, it has never (that anyone can point to) used them to threaten another company to force them to pay up. Instead, it has only used them defensively. Over the summer, Google got even more aggressive, speaking out about how patents had become a tax on innovation, rather than enabling innovation. In fact, we pointed out that Google actually seemed to be a perfect example of how innovative companies didn't need to be aggressive on patents -- a feeling that is pretty strong in the Valley.

Of course, about a week later, Google bought Motorola Mobility, almost entirely for its large patent portfolio. Given Google's outspoken viewpoint on patents, the assumption was that the company would continue to use those patents defensively against the increasing number of attacks by patent holders on Google. However, as MG Siegler is reporting, it looks like Google might at least continue Motorola's patent strategy post acquisition (which is about to be approved):

Google is saying that they don’t plan on making any changes to the way Motorola was enforcing their patent pool. This presumably means, among other things, they’ll now be suing Apple and trying to block the iPhone from being sold in certain countries.

This also presumably means they’ll be suing Microsoft and trying to bring down the H.264 video codec — which, by the way, Google created a competitor to (WebM) out of fear that someone would come along one day and try to enforce patents that would kill the H.264 video codec.

How’s that for a mind fuck?

The tables have gotten so turned that it’s now Apple and Microsoft who are complaining about patent enforcement. Specifically, both want assurances that patents licensed under fair, reasonable and non-discriminatory (FRAND) terms, are actually just that — fair.

In Motorola’s eyes, “fair” is Apple paying 2.25 percent on each iPhone and iPad sold. John Paczkowski of AllThingsD did the math: this would mean Apple paying about a billion dollars a year in royalty fees to Motorola.

A billion dollars. The mobile unit that Google is buying lost $285 million for the year last year. Apple would be indirectly keeping them, a competitor, afloat.

Of course, with some of these, the lawsuits are well underway, but Google could seek to dismiss some of the lawsuits if it wanted to. I think Siegler goes a bit far in claiming that Google automatically becomes "the villain" for gaining control over offensive patent moves that it's inheriting with this purchase. The bigger question will be what Google does going forward. However, if Google really does want to send a larger message around patents, it will get itself out of those efforts pretty quickly once taking over the company, reinforcing that the larger picture is more important than being able to extract a tax on competing products.

Of course, there is one other thing that makes this a bit more complicated, which I think Siegler ignores. He mentions how Google had to "make assurances that they would act fairly with patents they were acquiring." But he doesn't quite highlight the possible significance of that statement. If Google does get itself out of some of these lawsuits, and then chooses either to not enforce its patents against others or (better yet!) to freely license its patents to many other players, how long would it take Google's competitors to claim that Google was somehow "unfairly" using the patents to its advantage by giving them away for "free." Google competitors have used Google's free services as a stick against Google in the past, pretending that this meant they were abusing their position. I could definitely see some sneaky and ridiculous legal argument that if Google isn't making companies pay up for its newly acquired patents that it's unfairly abusing its position. This is, of course, a ridiculously stupid argument, but it's the nature of the world these days, where aggressive IP enforcement is seen as the norm.

Either way, I hope that Google stands by its words from last summer and is quick to extricate itself from offensive patent situations. But we'll find out soon.

Offense is the new defense

I wouldn't hold my breath. Yes, Google is a company driven by engineers, and engineers hate software patents, but in the end these kind of decisions are made by lawyers. Google did well to complain about patent laws while their portfolio was comparatively puny, but with the acquisition of so many valuable patents that strategy may well be shifting.

That'll only work if the companies sueing google, either directcly or indirectly, also, make a bold statement, otherwise the companies will keep abusing the system to get rid of competition as their doing now

Companies in googles situataion, have three optoins

1 : Do nothing, and leave themselfs open to an to attack

2 : Attack. Some companies, once something works i.e patent abuse, they'll keep doing it till they cant do it no more. These companies should'nt be allowed to do this, and sueing them back is, one way to get them to stop and think, otherwise they'll only take it as permission

3 : Total reform of the Patent system, back to protecting unique and inovated ideas and not a tool to abuse in order to sabotage the competition

The past six months have seen Google turn into yet another tech-based corporation like Apple and Microsoft. Yeah it started great but it's obvious by now that things have gone downhill at the top. Only a matter of time before they're thought of as one of the boys, grow stagnant, and another start-up shows up to steal their thunder.

Completely disagree

They should just launch an all patents attack in a Global Thermonuclear War style. Cut off all mobile devices from being sold in the US... (because the others would also do the same)... and see how fast the patent issues get notice from the common person, and then action by the government.

Scorched Earth might not be too bad, Forest Fires are helpful to the soil and forests in a natural settings. Potentially this might help fix the entire patents issue here in the US (and also hopefully others would follow our direction...they have in copyright/patent maximization.)

I know that patents are bad and all, and that companies shouldn't use them for evil. But....

Say what you will, but an evil part of me wants Google (who are the good guys, and have been for long) to actually bash the bad guys (Apple "all your rights are belong to us" and Microsoft "embrace extend exterminate") and get some money out of this. It seems fair somehow.

uh, there's more to it than this

what is going on? Apple and Microsoft want to be able to sue for their patents regardless of licensing - google does not.

So their statement does not have to do with the shakedown, Mike. As noted by PJ on groklaw: "See what the issue is? Apple and Microsoft would like to *change* FRAND terms to include a waiver of injunctions, which isn't now part of FRAND requirements. In fact, it's an equitable remedy. They'd like it to be removed as a defensive move, in order to disarm Android vendors, especially now that Google is buying Motorola. In short, it's not so much about loving standards all of a sudden as wanting to win by disarming the other side. And then there is the problem that no one can build a smartphone without paying so much for patents they can't make a profit. This is now hitting Apple and Microsoft too. I wish Microsoft and Apple would be more straightforward. Their paid "consultants" too. I mean if someone is being paid by Microsoft, whose position is he or she likely to push? So, good for BBC News for seeking out lawyers to check on what non-lawyer consultants are pushing out there"

As noted - their concern is tablets and handsets - not codecs.

I agree that they should do more, but I wouldn't act like they've been passive - quite the opposite.

Re:

There is a fourth option: You can maintain a large patent portfolio and not attack anyone who doesn't attack you. Reforming the patent system would obviously be better than that, but that takes time and you still have to do something in the meantime.

Which is really the problem with calls for Google to not use Motorola's patents against anyone. It would be one thing to argue that they should not be used for a first strike, but that ship has sailed: The companies who are being sued by Motorola are also trying to sue Motorola. You can't unilaterally disarm yourself in the middle of a battle and expect not to get slaughtered.

And sometimes the only way to reform a broken system is to push so hard until it breaks so spectacularly that all parties have to agree it must be fixed. Get Apple and Microsoft beating the "end software patents" drum and software patents will end.

Re: Re:

I suspect that's what Google's going to do. They have no real interest in enforcing patents against smaller companies; that trades goodwill and brand for money, and I like to think Google's smarter than that. The missiles are already launched vs Apple and Microsoft though. I expect we'll see that play out to the bloody end.

I think that Google should attack Microsoft and Apple, as they are both going after their Android partners (suing or making them pay fees per phone sold) I have absolutely no problem at all with them going after either of those companies in any way possible, but if they started going off and attacking unrelated companies then I would have to question their motives a little more.

I disagree, Sir.

Actually, I think Google may be able to do the most social good by abusing it's patents. Consider: Google is pretty much the curly mustached Snidley Wiplash of Congress. You've mentioned before how Congress hates Google just for being big. They were the sole dissenting voice allowed in the SOPA/PIPA hearing because they're easy to dismiss because they "make money off of piracy" or something.

So, then, I think Google should sue absolutely everyone. Sue phone makers, web browsers, search engines. Over the most vague and ridiculous patents it has. Google should turn into the biggest patent troll of all. In the short term it will obviously hider a lot of progress, as do all patent trolls. But I think that when some Congressmen see what their least favorite company (enemy of their **AA paymasters) is doing, maybe, MAYBE they will try to actually reform the patent code to stop Google.

I kind of do the same thing at work. Boss says "I am directly ordering you do only work on this project." I work on that project. And when I hit a roadblock and can't progress on it any more, I sit on the internet and do nothing. Sometimes the only way to point out the absurdity of the system is to follow it exactly to the letter and abuse it as hard as possible while still following all the rules. Then, hopefully the error is revealed and fixed.

Google has been receiving/is still receiving kicking after kicking from politicians and certain industries for a long time now. i still dont understand why it hasn't stood up for itself yet but i would think it's about time it put it's money where it's mouth is, showed it's true colours and decided on the direction it's going to take!

Re:

and, its believed that some of those handset manufacturers just decided to settle rather then spend money in the courts, which is classic bully tactics, and microsoft refuses to let the public know what patents we're actully used

Microsoft strategy - Tax you're OS competitor, so they are no longer the cheapest OS, for a given handset manufacturers

Apples strategy - Sue competitors for ridiculous patents in the hopes of getting their competitors products out the market

Really???

Really, people...ya'll don't see everything. Yes, patents need to be fair and always had to be. Though, if nobody else has noticed Apple and Microsoft never complained about fairness until they had to start paying out. Also i don't see how Apple can complain about how Motorola's being unfair with a 2.25% request when Microsoft has some phone manufacturer's paying 5%. If Microsoft and Apple want to team up and finally whine when it's THEIR money on the line they better look behind them on what they charge people as well. Also, Steve Jobs said himself that he hated Android and would attack any manufacturer using it with no remorse. I understand he's passed now and god rest his soul but the company itself is still ruling like he's alive. If they want to attack Android then they should be able to take what they've been given all these years to all those phone manufacturer's that are using Android. Then after they've paid up and it's all even, THEN they can discuss what's fair.

I have mixed feelings here

I would love to see Google take the moral high ground but at what cost? Samsung is being hounded by Apple at every turn and MS makes more money off Android than Google. A little payback would be great and justly deserved. There is also the slim hope that a patent nuclear war would finally cause people to take notice of what is going on and demand real reform.

Does Google have any choice?

I wonder if Google's officers and managers have any choice in this matter. If you are sitting on a pool of patents that, if used offensively, could garner google billions of dollars, don't the directors and officers have a fidiciary responsibility to the shareholders to pursue it? I would imagine they could risk a lawsuit if they left some money on the table. Unless they adopt an explicit corporate policy about this and justify it on some kind of PR grounds?

Re: Does Google have any choice?

Yes, they do have a fiduciary responsibility, that is ameliorated to some degree by the business judgment rule.

Yes, Motorola held a slew of patents, many, many of which reflect forward thinking R&D activities pursued many years ago. With Google about to become, if the SEC tea leaves are being read correctly, an overseer of product manufacture, a major shift from its products to date, it may very well have little choice by to try and preserve and grow its market position for what I am convinced are some of the very best products on the market.

Fight bullies with bullies

I love the fact that Google is able to gain leverage against the companies by continuing the MotoPatents. These companies have try to limit one of Google's biggest products, Android, by deteriorating the competition using the operating system (acting to decrease sales based on patent issues with SGII, HTC, et al) Fuck Microsoft anf Fuck Apple. If the biggest proponent of free (GOOGLE) is able to combat corporate greed and malice with a taste of their own medicine, CARRY ON!

Those companies aren't going to react to a play nicey nicey bullshit you propose. Google's been playing by the rules and has partners that are suffering losses at the hands of MS and Apple b/c of their tyrades. It's time to fight fire with fire. Fire away, Google. It's work saying one more time: FUCK APPLE AND FUCK MICROSOFT - you opened the door on this one.

Google and the Motorola patents

WAIT! Why are we "pegging" at an extreme YA (yet again)? We seem to be saying if "they" (Apple, Motorola, Oracle, etc.) don't move aggressively on patents, Google shouldn't, and if "they" DO move aggressively on patents, Google shouldn't???
What happened to fairness, balance of power, etc.? Are these just meaningless terms when applied to Google?

Re:

Go google!

Why is it that when Apple and Microsoft attach other companies for the most ridiculous patents, ie bouncing icons, slide switch etc, then they are good, yet when Google fight back on behalf of the android supporters then its classed as being inappropriate.
Apple and Microsoft started the mess, and Apple recently has taken it to a new obscene level to try and stop competition and now cying fowl because someone is finally fighting back.
Well done to Google (and Samsung) and keep it up, until someone finally sees the patent system for what it really is!

Re: Go google!

While I am an Android fan and have found many things to praise in Googleís actions up to this point, I donít think itís a good idea to fight the bad guys by becoming just like one of them.

Power corrupts, and Google is just another corporation, after all. It isnít much of a stretch to think that those patents, initially acquired for purely defensive purposes, might gradually become just too tempting not to exploit as a source of revenue in their own right, particularly if the company were to make a few missteps and fall from its seemingly unassailable can-do-no-wrong position (as Microsoft has done).

Motorola independence from Google

When Google bought Motorola, it reassured all Android vendors that Moto would be independent of Google. By asking Google to end Moto's lawsuits, you're asking Google to violate the pledge of independence.

And this discussion that 2.25% is not fair and reasonable because it would mean a billion dollars is a red herring. What are other common licensing fees associated with FRAND patents? Also, what kind of percentage of phone sales does Microsoft get from each Android vendor? This kind of information backed by a reputable source would provide valuable insight for readers about what is fair and reasonable.

Re: Motorola independence from Google

Fair and reasonable here means, so it seems, placing patents on a shelf and letting them gather dust, thus enabling all your competitors to utilize the benefits of your R&D to incorporate into their products the feature discriminators you were counting on the distingush your products from theirs.

Re:

I agree 100%. I don't know what you would call it, but basically Google is the smart one, and Apple and Microsoft are bullies. Now that Google has "dirt" on the bullies, G is picking on them until they cry to get a point across to them, and the others (which in this case includes the Gov.).

I don't believe Google is suddenly "evil" because it's standing up to the "bullies". Google is just fighting for the little guy again. I mean sure they could just sit on the patents to defend themselves, which is a great short term solution, but without serious demand the patent system will never be reformed. Yeah it takes time, but the sooner you start the sooner the changes are made... which means the sooner we start to see some real innovation.

Re:

It is impossible to stop infringing on patents. That's why software patents are even more evil than non software patents.

If you write a program more sophisticated than Hello World, you are infringing on literally dozens of patents owned by various mega corporations. Patents on such ingenious technology as displaying an animated placeholder while a background process downloads content. Wow, now that's genius! It's basically a patent on the spinning hourglass -- and one of the actual patents Microsoft is suing Barnes & Nobel for infringement. The actual reason Microsoft is suing Barnes & Nobel is because B&N had the audacity to use Android in their Nook e-book reader -- how dare they! Android is successful, Microsoft is in decline, and they want to sue those who are successful.

So how exactly do you propose any company NOT infringe on others' patents when the real problem is that the patent system is fundamentally broken in that it grants patents on obvious and trivial things?

Re: Re:

I think theres more than what comes to the eye here. Google may be playing a real smart game here. When they decided to buy Motorola they pretty much said they were gonna leave the company alone (ie: operating separately) and only using the patent portfolio defensively. This would leave Motorola free to sue the fuck out of whoever they want. Also, if Motorola patents are strong enough to actually harm other bigger players, then Google could use Motorola as some sort of henchman that will strike hard at the other companies to show them how patents can be damaging.

I have mixed feelings about this. Apple is very aggressive with their patents, they deserve to be sued into oblivion (and they are messing with a device I own and like which is from the Galaxy series from Samsung) and that makes me mad. If I were Google I'd cause some major mayhem on the patent issue and pull out in the end just to make the others shit their pants and speak against the patent system. Sure it can backfire but it might speed up the changes.

Re: Completely disagree

That. It'd be epic if they went nuclear with all major companies but I don't think they'll go as far as blocking all phones. They have partnerships and their partners should be thankful by that. I think they should and might go nuclear with Apple and Microsoft as those are the ones going aggressive against Android. Let us see what happens.

Re:

So they've got no complaint when they're suing entire sections of their competition out of business, but when people start suing them for the same kind of thing, it's not cool? Fuck them. They started this, they knew this could happen. Let them loose.

never again

Ever since Intellectual Ventures started full-bore down the path of patent litigation, I will never again believe the claims of any entity that it is acquiring patents "for defensive purposes only." Google is no exception.